The Bosnian Serb member of Bosnia's collective presidency, Mirko Sarovic, resigned yesterday after being accused by the international community's Office of the High Representative (OHR) of being directly responsible for a Bosnian Serb company's violation of the UN arms embargo against Iraq by refurbishing engines for Iraqi military aircraft. Meanwhile, NATO is accusing the Bosnian Serb authorities of engaging in espionage against the Dayton-authorized Stabilization Force (SFOR), European Union police, and the OHR, as well as Bosnian institutions and individuals. RFE/RL looks at the issue of political stability in Bosnia-Herzegovina.

Prague, 3 April 2003 (RFE/RL) -- The international community's high representative for Bosnia-Herzegovina says the arms-to-Iraq affair has done more damage to Bosnia's reputation than anything else since fighting ended seven and a half years ago.

Paddy Ashdown made the remarks to reporters in Sarajevo following Mirko Sarovic's announcement yesterday in the Bosnian Serb capital, Banja Luka, that he was resigning from Bosnia's collective presidency. He said his decision was made in order to take responsibility for the affair surrounding the sale to Iraq of engine parts for military aircraft from the Orao factory in Bijeljina.

Sarovic also said, "In the course of the past day with the high representative and other officials and my friends and colleagues in the Serbian Democratic Party, I see that at this moment it would be advantageous and wise, even if the arguments over Orao do not hold up entirely, to make the decision that I've made -- morally, too."

The affair surfaced last year following a search by the NATO-led peacekeepers of SFOR of the Orao factory. But according to Ashdown, SFOR also uncovered on 7 March clear evidence that the Bosnian Serb Army was engaged in "aggressive intelligence operations against Bosnia-Herzegovina institutions and citizens, and international organizations working in BiH had compounded the damage done by the Orao affair."

Ashdown says these activities "clearly and seriously violated the Dayton peace accords" and the instructions of SFOR commanders "upon which the peace and stability of this country is founded." He added, "It is no exaggeration to say that these activities could have placed this country's stability in jeopardy."

Sarovic was president of the Bosnian Serb entity, Republika Srpska, when Orao signed arms contracts with Iraq in direct contravention of UN Security Council resolutions. And Ashdown noted that with war now under way in Iraq, possibly involving weaponry exported from Bosnia, he "cannot overstate the seriousness of this affair."

Ashdown noted Sarovic was also Bosnian Serb president when the Bosnian Serb Army was spying on Bosnia's citizens, SFOR, the international community, and neighboring countries.

NATO Secretary-General Lord George Robertson described the spying as "an active policy of aggressive intelligence operations by Republic Srpska against the international community" and "blatant and unacceptable defiance of the [Republika Srpska] authorities' obligations under the Dayton agreement."

For his part, Ashdown noted that in both cases, the constitution of Republika Srpska itself establishes that Sarovic was the top official with political responsibility in these matters. He welcomed Sarovic's decision to accept responsibility and resign, a move he termed "an honorable act, which begins to set the standards for political responsibility which Bosnia-Herzegovina needs to adhere to if it is to become a European democracy."

Ashdown noted that Sarovic's resignation enables Bosnia "to close the chapter and move forward with reform," adding that is up to Bosnia's institutions to choose a successor.

Republika Srpska President Dragan Cavic said nothing that has come to light in the Orao affair shows that Sarovic bears direct responsibility for the illegal sales of arms to Iraq. But he said under the circumstances, resigning was the reasonable thing to do. "As far as my colleague and friend, Mr. Sarovic, is concerned, I see that he did the only thing he could do," Cavic said.

Similarly, Republika Srpska Prime Minister Dragan Mikerevic described Sarovic's resignation as a "personal and moral act aimed at setting new standards for all those in public office" and an "act of responsibility toward the spirit of the UN resolution barring arms sales to Iraq." And he said it restores credibility and competence to Bosnian Serb institutions.

In the past several years, Bosnia-Herzegovina has experienced relatively little change. It is a conglomeration of statelets or "drzavice," functioning as an international protectorate, and is only nominally a sovereign state. The sovereignty that exists is severely limited by a self-imposed, internationally approved division into two entities and the Muslim (Bosniak) Croat entity's division into 10 cantons.

Moreover, the country is an international protectorate, supervised by appointees of the international community in the Office of the High Representative and occupied by SFOR, currently led by NATO and eventually to be run by the European Union.

Ashdown has succeeded in strengthening the central all-Bosnia government by adding justice, security, and transportation to the already extant central ministries of foreign affairs, foreign trade, civil affairs, finance, and human rights. At least for the time being, however, defense remains the responsibility of the individual entities.

Ashdown has also simplified the decision-making process by ending the tradition of rotating the posts of minister and two deputy ministers between members of the three nationalities, and reducing the number of deputy ministers per ministry to just one.

The Organization for Security and Cooperation in Europe (OSCE) today commended Bosnia for accelerating the pace of its reforms, but noted that Bosnia has a long way to go in fully establishing the rule of law and economic regeneration.

The head of the OSCE mission, Robert Beechcroft, told the OSCE's Permanent Council in Vienna that too often Bosnia's authorities only implement reforms under pressure from the international community.

Similarly, the head of the European Commission delegation in Bosnia, Ambassador Michael Humphreys, told the OSCE today that Bosnia is still too dependent on the international community and that the country's political leaders have yet to adopt reform as their own policy.